The Trump administration said Tuesday it's negotiating with nine oil companies to rent the space to store 23 million barrels of oil in the U.S. Strategic Petroleum Reserve, due to expected surpluses.
"When producing oil you have two options -- you either use it or you store it," Energy Secretary Dan Brouillette said in a statement. "With the impacts caused by the COVID-19 pandemic, we are seeing an enormous decrease in demand as our country works to contain the virus.
"This is why making storage capacity available in the SPR is so important."
Brouillette added that having storage space is critical for the U.S. energy industry and its workers.
The Energy Department said the bulk of the oil will be pumped into the reserves in May and June in four major reserves in Texas and Louisiana. The department did not specify which companies it will rent the space to.
Earlier this year, Democrats in Congress blocked the Trump administration from paying $3 billion to fill the strategic reserve. Trump said it was an ideal time given the lower oil prices, but opponents viewed it as a move to prop up the fossil fuel industry.
Lack of storage space was an issue during recent negotiations between OPEC nations and Russia. The parties ultimately agreed last week to cut production by 10 million barrels a day for the next two months.
